NHL's "Southern Strategy" of Moving Canadian Teams Is a Failure

It may feel like summer in many places, but hockey fever is gripping western Canada. The Vancouver Canucks began their quest for their first-ever Stanley Cup in the club's 40-year existence this week against the Boston Bruins. Meanwhile, to the east, Winnipeg finally got NHL hockey back after 16 years wandering in the sport's diaspora.

This episode makes you wonder how NHL hockey ever got to Atlanta, Phoenix, or Columbus instead of staying in Canada, its home and native land.

Still, once last week's cheering and rallies in the Manitoba's city center die down, the harsh economic realities of having an NHL team intrude. As I noted in my MarketWatch.com Canada column this week, it's like a file clerk who's just brought home a new BMW: He wakes up and his first thought is: "I'm excited, but how the heck am I gonna pay for this thing?" The NHL is openly wondering the same thing. But not to worry.

Canada is where NHL hockey belongs, not in the football-centric U.S. South, for crying out loud. A poll this week showed that Canucks-crazed Vancouverites are more excited about this Cup final series than they were about the 2010 Winter Olympics there.

Winnipeg hockey fans were lectured last week by hard-nosed NHL commissioner Gary Bettman: In making the long-awaited announcement that the Atlanta Thrashers were indeed being relocated to that frigid Canadian prairie city, Bettman also warned that the club had better sell out all its seats. That's partly because Winnipeg has the NHL's smallest arena -- the new MTS Centre has only 15,000 seats -- and partly because operating a profitable major-league pro sports franchise these days -- except for the NHL -- is no slam dunk, as Atlantans can tell you.

Still, it took about 15 minutes to sell all those tickets. And those Winnipeg season tickets Bettman mentioned aren't cheap, either -- they'll average around $85 next year. There are thousands on the waiting list.

Even Canada's newspaper of record, the Toronto Globe and Mail (whose owner, Reuters billionaire David Thomson is part-owner of the new Winnipeg team) wonders aloud if the economics of big-league sports will pencil out for the isolated Manitoba city, the NHL equivalent of also-isolated-and cold Green Bay

"Small-market NHL cities need more than fervent fans," read the clear-headed headline in the Globe's Business section this week after the sale of the Thrashers was finalized.

A hefty price tag will come with the $170 million Winnipeg purchase and relocation of the club. The Canadian Press notes that Winnipeg is re-entering the NHL (its former team was called the Jets) at a time when it has never been more expensive to do business.

All told, the Winnipeg payroll could exceed $50 million.

There's one big difference between the NHL's Winnipeg team and the NHL's Packers, the Globe and Mail adds:

The NFL, currently on strike, has $9-billion (U.S.) in league-wide revenues and $4-billion in national U.S. TV deals alone. As a result, a team can locate in a tiny market like Green Bay and still compete with the likes of Dallas or the two New Yorks for top talent. Heck, Green Bay could play its games in an empty stadium and still turn a profit.

Not Winnipeg, however.

One big advantage Winnipeg has going for it is strong fan support for the sport -- even smaller NHL cities like Ottawa and remote Edmonton sell out seats and merchandise, as opposed to bigger cities in the U.S., where hockey isn't a religion as it is in Canada. In Canada, hockey has proved to be a potent economic draw even in small towns.

As the Globe puts it:

Winnipeg isn't Atlanta or Sunrise, Fla., or Phoenix or Nashville. Unlike those sunbelt outposts, hockey really does have strong roots in Manitoba, as witnessed by the financial success of so many fine teams at lower rungs of the sport (Go Wheat Kings!).

Referring to the Winnipeg team's arena in his relocation announcement, Bettman said of the franchise: "It isn't going to work very well unless this building is sold out every night."

But it will be -- unlike arenas in Atlanta, Phoenix and even the aging Nassau Coliseum, home of the Islanders, where thousands of seats go empty.

When I moved to Montreal, I quickly learned about the powerful lure of big-league hockey: Season tickets at the old Montreal Forum (and new Bell Center) have been passed down from generation to generation of Quebec families.

I'd bet Quebec will be the next Canadian city to gets its NHL team back.

And since we're betting, I'd also wager that the Canucks will bring Lord Stanley's Cup to the Pacific Northwest for the first time ever in modern times.